FABAG rejects new tariff hikes; Demands immediate reversal and full utility sector audit

The Food and Beverages Association of Ghana (FABAG) has demanded the immediate reversal of the latest utility tariff increases, warning that pushing through the adjustments without addressing long-standing structural failures will further worsen Ghana’s economic challenges.

In a statement issued on December 8, the association rejected the Public Utilities Regulatory Commission’s (PURC) decision to raise electricity tariffs by 9.8 per cent and water tariffs by 15.9 per cent. FABAG described the move as “unacceptable, unjustifiable, and insensitive,” arguing that consumers cannot be burdened with higher costs when the fundamental problems within the utility sector remain unresolved.

The association said the tariff hikes cannot be defended when the Electricity Company of Ghana (ECG) has failed to provide “clear and measurable” strategies to address what it called the company’s “deeply entrenched inefficiency, financial waste, and mismanagement.” It said revelations by the Public Accounts Committee about ECG’s operational failings only reinforced the need for reform, not increased tariffs.

According to FABAG, ECG “has become the very disease it was created to cure,” noting that instead of powering national growth, the company has become a major source of economic strain. It cited persistent technical and commercial losses, corruption, revenue leakages, poor staff attitudes and declining service quality as the true drivers of the sector’s deterioration.

The group said consumers and businesses should not be forced to pay for what it described as “incompetence and corruption” within ECG and the Ghana Water Company. It also criticised the large disparity between public sector salary increments and the new utility rates, arguing that it is “unacceptable that government increases workers’ pay by 9% but raises utility tariffs by 25.7%.”

FABAG raised further concerns about ECG’s expenditure patterns, pointing to an unapproved budget overrun of GH¢189.2 million and questioning why the company’s procurement spending jumped from under GH¢1 billion to over GH¢8.3 billion in 2023. It said ECG’s technical and commercial losses, now exceeding 30 per cent, place it “among the worst-performing utility companies in Africa,” yet it has not produced any credible plan to reduce the losses.

In addition to operational inefficiencies, FABAG warned that the tariff increases will push many businesses—especially those in food processing, storage and distribution—towards collapse or significant price hikes. It said rising operational costs will further escalate food inflation and deepen the cost-of-living crisis.

The association criticised the lack of accountability mechanisms to compel utilities to reduce losses, improve customer service or curb internal theft. It said consumers should not bear the cost of inefficiency when ECG “continues to withhold transparent operational audits” and fails to demonstrate value for the revenue it collects.

FABAG argued that tariff adjustments alone cannot resolve Ghana’s power and water sector challenges, insisting that “the country cannot tax or tariff-increase its way out of a broken system.” Instead, the group called for comprehensive restructuring, digitisation, improved revenue management, and strict accountability measures.